Govt Announces Rs 30,000 Crore Securities Switch Auction Via RBI Platform On May 18

New Delhi, May 14 (KNN) The Government of India has announced an auction-based switch of government securities worth Rs 30,000 crore in face value as part of its debt management strategy.

Rs 30,000 Crore Securities Switch Auction Announced 

According to the notification, market participants will be required to submit bids through the Reserve Bank of India’s Core Banking Solution platform, e-Kuber, by specifying the amount of source securities they intend to sell along with the quoted prices of both source and destination securities.

The auction will follow a multiple-price format, meaning successful bidders will receive allotments at their respective quoted prices for both source and destination securities.

Bidding To Be Conducted Through RBI’s e-Kuber Platform 

Bids can be submitted electronically on May 18, 2026, between 10:30 AM and 11:30 AM, with auction results scheduled to be announced the same day. Settlement will take place on May 19, 2026.

The government has retained the right to accept bids for less than the notified amount, purchase marginally higher amounts due to rounding adjustments, or reject bids either fully or partially without assigning reasons.

Under the mechanism, participants bidding in the switch auction agree to sell source securities to the government while simultaneously purchasing destination securities at their quoted prices.

Each bid must specify the face value of source securities being sold, the price of those securities, and the selected destination securities along with their purchase prices. 

Participants may bid for multiple destination securities, provided their aggregate bids do not exceed their holdings in source securities.

Multiple Bids Allowed Under Auction Framework 

The minimum bid size has been fixed at Rs 10,000, and bids must be submitted in multiples of Rs 10,000 thereafter. Multiple bids are allowed, but the total value cannot exceed the notified auction amount.

The government clarified that the price of source securities must match the previous working day’s closing price published by Financial Benchmarks India Pvt Ltd, and bids quoting different prices will be rejected.

The auction cut-off will be determined based on destination security prices, with bids placed at or above the cut-off considered successful. In cases where multiple bids are received at the cut-off price, allotments may be made on a pro-rata basis.

The government also outlined procedures for handling odd-lot allocations, rounding adjustments and accrued interest settlements to ensure smooth execution of the transaction. 

While the conversion is expected to remain broadly cash-neutral, fund settlement will be carried out for net accrued interest and any cash consideration arising from rounding differences.

(KNN Bureau)